Following a comprehensive survey of Shelter Offshore readers, we discover the ways British expats like to manage their money, and why you are allowed to keep your British bank account open if you want to.
The majority of expatriates still prefer to repatriate their cash when they’re living abroad, according to our recent survey of Shelter Offshore readers. No matter where Britons move to abroad, and no matter how sophisticated the banking opportunities are in their new nation or offshore, most Brits still prefer to send at least some of their money home.
These are the conclusions that we have been able to draw after speaking to 120 British expatriates about their banking and saving habits. However, confusion abounds about whether expats are actually allowed to retain their British bank accounts, or whether they are in fact breaking the law by keeping accounts open when they move abroad.
In this report we’ll dispel the myths that abound, and reveal how and why you can keep your British bank account open when you move abroad. However, we will also explain why expats may be doing their finances a disservice by repatriating all of their money back onshore into the UK.
The Shelter Offshore Banking Survey
We received a positive response from the 120 British expatriates chosen to complete a Shelter Offshore survey into their banking habits…and the number one overriding conclusion that can be drawn from the answers we received is that most Brits want to keep their current account in the UK open even if they move abroad permanently.
Reasons cited for wanting to retain an account in the UK range from ease of ongoing money management to wanting the perceived safety/compensation that may come with having money held in a British bank, onshore in the UK if that bank should fail. Interestingly, another a very common reason for retaining an account, as cited by well over 70% of respondents, was wanting to have some form of credit rating remaining in the UK in case of a future repatriation.
As backed by the findings of a similar survey undertaken by ExpatMoneyChannel however, our readers also advised that they had received very contradictory advice and information from their banks about the legalities of retaining an account in the UK once they were living abroad.
Are Expats Allowed to Retain a British Bank Account?
For all those Britons now wondering whether they are allowed to keep their UK bank account open – the rules according to the Treasury’s anti money-laundering regulations are very clear. They explain that YES you can keep your account open as long as you meet and fulfil the ‘know your customer’ due diligence requirements of the bank in question.
According to a spokesperson from the Financial Services Authority: “it is recommended, [under the Treasury’s ‘know your customer’ regulations], that firms apply ‘enhanced due diligence’ to customers abroad, as risks of money-laundering are higher…” however, that does not mean that Britons moving abroad cannot keep their accounts open.
The number one sticking point with regard to proving identity to meet the know your customer requirement however, as reported by our surveyed readers, is the fact that a number of banks require their customers to have a UK address in order to maintain a British bank account.
Some Shelter Offshore readers have simply changed their address to that of a parent or a family member to get around this issue, others have felt pressured to close their onshore account despite the fact that they would really like to maintain it. Others are with more ‘understanding’ banks and have been able to maintain their account despite now living abroad.
From our own deeper and closer research, the pattern most discernable is that for those customers who have been long-standing account holders with a given high street bank, they receive the more flexible service going forward once they expatriate. This is a guide rather than a rule however – the only absolute rule being that you will have to fulfil your bank’s ‘know your customer’ due diligence requirements in order to maintain your British bank account.
Requirements can differ per bank, depending on the institution’s own interpretation of the Treasury’s guidelines.
Bank Account Solutions and Alternatives Favoured by Shelter Offshore Readers
Of those readers who felt it was too difficult to maintain a British bank account, over 50% had instead swapped and opted for an international account with their current banking provider.
From HSBC to Lloyds, and from Barclays to Citibank, all leading banking providers offer a range of expatriate/offshore/international bank accounts suitable for those leaving their nation of residence to go and live abroad.
If you’re not comfortable maintaining your British account when you move, or if your bank is giving you a headache about the relocation and your rights to keep your account open, explore what’s on offer from your bank in the form of an international account.
If your bank really wants to retain your business, they will assist you with opening an international account. And if they won’t help you, our article about who offers expats the best bank account might help!
Finally – It Doesn’t Always Pay to Keep Money Onshore
Whether your overriding concern relating to your money is the safety of it should a bank collapse, or getting the best interest rate to ensure your savings beat inflation, there are many reasons why expatriates should carefully consider where and how they save and invest their hard earned cash.
Your considerations need to extend to you examining the rate of tax you may pay on interest earned depending on how and where you save, who will have access to information about your money, how safe the jurisdiction is where your money is parked, and how secure the bank or investment house is too.
You need to consider whether there are tax and investment advantages to you saving or banking offshore, you need to explore risk versus return and determine what you’re comfortable with in terms of the way your money is saved…and ultimately, you need to make sure you take independent, individual advice from a reputable, regulated and experienced expatriate financial adviser to make sure your financial position is properly positioned and protected.
For some expats, retaining a bank account in the UK is simple and makes sense. It gives them a portal through which they can simply manage any ongoing financial obligations in the UK for example, and it maintains a traceable credit record that may be of use to them if they decide to repatriate in the future.
For other expats it is unwise to repatriate all monies however, as there could be negative taxation or confidentiality connotations, and better returning offerings may be accessible offshore or even in their new nation of residence.
Ultimately, the final word on this needs to be that all expatriates should take personal and professional advice about their money’s management from an expert independent adviser. This is because every individual’s situation is different, and because there are so many positive options and alternatives open to expats for the management and enhancement of their financial position.
Thank you to the Shelter Offshore readers who took part in our survey. If you would like to be considered for a future survey, please complete our contact form advising that you are happy for us to survey you confidentially in the future.
Contact: www.shelteroffshore.com
